CAIB 1 QUESTIONS AND ANSWERS GRADED A+

CAIB 1 QUESTIONS AND ANSWERS GRADED A+ Risk the chance of financial loss to which an object of insurance is exposed Speculative Risk possibility of financial loss or gain Pure Risk Chance of financial loss, no gain Insurance undertaking by one person to indemnify another person against loss or liability for loss in respect of a certain risk or peril to which the object of insurance may be exposed or to pay a sum of money or other ting of value upon the happening of a certain event Contract an agreement between two or more persons which creates an obligation to do or not to do a particular thing Insurable Interest showing you would suffer financially by a loss Utmost good faith caveat emptor, buyer beware. Exercise a higher standard of honesty Indemnity putting the insured back into the same position as they were in as immediately prior to loss Binder Contract of insurace Agency Agreement source of a brokers authority Void Unable to support its intended purpose, treated as though it never existed Voidable void to the wrongdoer but not to the wronged party unless they elect to treat it so Peril The cause of a loss Direct Loss When the object of insurance is the loss Indirect loss Losses which arise as a consequence of a direct loss Actual cash value New or replacement cost of the insured property less depreciation Replacement cost repair or replacement of lost or damaged property with new property of like kind and quality without depreciation Valued policy insured and insurer agree on the cash value of the property at the time the policy is issued Blanket coverage single limit of insurance for all property falling within specific class Scheduled coverage property is itemized on the policy Fiduccary someone who occupies a position of special trust or confidence in the handling or supervising of the affairs or funds of another